Director's Column

The Library and the State Budget

By Alan Hall, Director, PLSJ
Publish Date - Sunday, August 07, 2005

The State Budget has been established for the next two years.The Legislature acted upon the Governor's recommendations, passed a budget bill, and he signed it into law. The Governor recommended, and both the Ohio House and Ohio Senate passed a budget bill that contained various cuts to the three Local Government Funds.

In the Conference Committee, the very last step of the state budget process, those cuts were removed from the budget bill. The loss of $ 162,000 to our library's budget was averted in 2006. That was great news for our library system and its customers, however there is more to the story.

First, the state budget for public libraries has been "frozen" since 2001. Two cuts were made to the fund in the following years making an 8 percent decline in funding. In the four years since the freeze in funding, increases in the library's budget have been met by cuts in something else in the budget.

Secondly, the freeze in funding for the next two years also contains a "Reconciliation" factor in which the Ohio Department of Taxation will calculate the difference between the amount paid to the Local Government Funds under the freeze, and the amount that would have been paid without the freeze. If the freeze amount is greater than the formula amount, then the excess will be recovered in the next month and returned to the General Fund of Ohio. The Taxation Department states that only a significant decline in state revenues would trigger this adjustment. It remains an unknown factor. With the reductions underway in the State Income Tax rates, future reductions after 2007 are likely unless addressed by legislative action.

Thirdly, a proposed Constitutional Amendment being promoted by Secretary of State Ken Blackwell could change the entire funding mechanism for Ohio government. If the proposal reaches the November ballot and is approved, public libraries will lose their dedicated source of state funding. Funding of local government units ranging from fire and police departments, schools, villages, townships, counties, cities, etc. would be determined by one Local Government Fund comprised of a portion of state revenues. Existing funding formulas would disappear, and the Board of County Commissioners would have to make the determination for the division of the fund, which would contain less money than what is currently expended by those units combined. This approach has been absolutely devastating in other states, particularly Colorado.

So, how did public libraries end up in the state budget? The earliest library legislation in Ohio dates back to 1805. Early libraries were funded by city government as a department. In 1853, schools were allowed to establish public libraries for their students as well as the public. A reorganization took place in 1869 allowing libraries to operate independently of their city or school structure.

Into the 20th century, public libraries operated under a variety of authorities. In 1931, State Senator Robert Taft fathered laws that stabilized funding under one source and allowed libraries to operate under their own authority.

For 50 years, public libraries were funded by the situs intangibles tax. A study commission in 1982 recommended the repeal of the tax, and a replacement from the state income tax. The reasoning was that the former repealed tax proceeds would be collected in the future by the state income tax. And so, here we are part of the state budget, watching to see what happens in 2006 and 2007.